Bulb Energy makes deal to delay repaying £55 million of Loans as rising wholesale prices bite

The fastest-growing business in Europe, Bulb Energy has agreed to a deal with its lenders to delay repaying £55 million in loans made by its investors as, like many other energy suppliers, it struggles to get a grip on rising wholesale energy prices.

Rising Prices

Rising Customer Complaints

Bulb Energy has also seen a rise in the number of customer complaints with it becoming the most complained about large energy supplier in the first three months of 2021.

According to Ofgem, the company garnered 3,265 complaints per 100,000. A number that is three times higher than the likes of British Gas.

When compared with the same period in 2020 where the company received just 689 complaints per 100,000 customers it’s looking like there may be some trouble in paradise.

Also read: Bulb Energy ordered to pay £1.76 million by Ofgem

Loan repayment

Bulb has grown rapidly since its founding and has expanded its customer base from just 30,000 customers in 2017 to over 1.7 million today. Its rapid growth has also seen it begin operating overseas in the USA, France and Spain.

At its founding, Bulb like most new and smaller suppliers offered tariffs that they knew would make them a loss to snap up customers but once that has been achieved, they are then forced to hike prices, a move that more than likely sees customers switch to cheaper alternatives.

Its rapid expansion has seen the supplier make losses of over £220 million from 2017 to 2020 and to secure its finances it has relied on investors. It managed to pay for some of its expansion via customer payments but has also needed to take out substantial loans.

In this case, a £55 million loan was due to be repaid in December this year, but it has been granted a one-year extension by the banks.

The combination of rising customer complaints, the need to push back the repayment of loans, continuing loss-making and the surprise departure of company co-founder Amit Gudka’s in February could mean that Bulb’s light could be dimming.

A Bulb spokesman said: “We’re proud to be named the fastest-growing company in Europe, providing excellent service, fair and transparent prices and green technology to help people save money and reduce carbon emissions.”

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